Anz Grindlays To Syndicate $63m Aircraft Deal For Jet

ANZ Grindlays Investment Bank will syndicate an asset-backed hire-purchase aircraft finance deal worth $63 million for Jet Airways next week

This is the first ever cross-border aircraft financing deal for a private sector airline out of India.

ANZ Grindlays has fully financed the purchase of two Boeing 737-400s for Jet Airways through a hire-purchase structure.

The $63 million hire-purchase transaction has a tenure of 2 years and 11 months, and ANZ Grindlays is expected to syndicate $50.4 million out of the total transaction of $63 million. The remaining portion will be retained by ANZ Grindlays on its own books.

The pricing of the deal will only become clear once the syndication is completed next week to other international banks.

 

The hire-purchase deal has been structured through an ANZ Grindlays subsidiary, ANZ Grindlays Export Finance, based in London. This SPV will own two aircraft bought from Malaysian Airlines, and it will issue bonds to investors against the assets.

ANZ officials said the asset-backed structure of the transaction will help them in syndicating the deal. This is because Boeing 737-400s are one of the most sought after aircrafts in the international market place and is expected to retain much of its value.

"This is an additional comfort for the investors in addition to the fact that the financing is for a sound company," said an official.

Though no profit figures for Jet Airways are available, the turnover of the airline, according to company officials, has jumped 37 per cent to $200 million in 1996-97.

According to ANZ officials, the pricing of the deal is comparable to other sources of finance like syndicated loans. The repayment schedules are skewed so that higher repayments come up towards the end of the transaction.